Maker DAO
Basics * Maker is a stablecoin and decentralized cryptocurrency leveraging platform built on the Ethereum blockchain. * There is the MKR coin, and dai token. MKR is used for governance, dai is used to keep the peg to SDR (the IMF‘s Special Drawing Rights) * Besides a whitepaper, also has a purple paper on why they have a reference implementation using the Haskell language. * MakerDAO’s stablecoin, Dai, has entered Beta testing on Wanchain. This integration makes Dai the first ever cross-chain ERC20 token. The Dai token will utilize Wanchain’s cross-chain functionality allowing for Bitcoin to be exchanged for Dai in a fully decentralized manner and to potentially add Bitcoin to its collateralized debt position in addition to Ether. * There are three parts to Maker: the Makercoin holders that make up its government, the Keepers who “mine” margin calls and arbitrage opportunities, and the CDP engine. Each piece supports the other to create the Maker leverage platform and its stablecoin, dai: # Decentralized Governance model: “Maker has a governance token called Makercoin (MKR) which is used for voting on proposals. Voting is weighted based on MKR holdings. Reward comes from weekly buy-and-burns, in which Maker uses its profits to buy back MKR from MKR holders. Any bought-back MKR gets destroyed, lowering the overall supply of MKR and driving up the price for those still holding.” # Keeper: Right now Keeper is nothing more than a Docker image with a few programs that help keep the Collateralized Debt Position engine running. In particular, Keeper provides price feeds for Maker and performs margin calls on undercollateralized debt positions. We also plan on adding programs to help maintain other DAOs, such as the Ethereum Alarm Clock. Since Keepers are rewarded for these services, Keeper can be thought of as a sort of “meta-miner.” We eventually want to provide for sale a Raspberry Pi pre-loaded with the Keeper image to make the barrier to entry as low as possible, and to also help fund further Keeper development. # The Collateralized Debt Position Engine: The CDP engine helps dai maintain its peg with the IMF‘s Special Drawing Rights. It incentivizes untrusted, anonymous actors to drive the price of dai toward the price of SDRs. It also provides a platform by which those bullish on Maker-supported cryptocurrencies (such as ether or bitcoin) may take leveraged long positions on those currencies without having to trust an exchange. Collateralized Debt Positions on the Ethereum blockchain consist of some locked amount of cryptocurrency and some amount of issued dai. When one opens a CDP, the CDP issues one an amount of dai of lesser value than the cryptocurrency one locks up in the CDP. If one provides 150 dai worth of bitcoin for a CDP at 150% collateralization, for example, the CDP will create 100 dai for one out of thin air. One may then close out the CDP at any point in the future by paying in the amount of dai issued, which then returns to one the underlying collateral. To build on the previous example, 100 dai would release one’s bitcoin collateral. The 100 dai would then be destroyed. One caveat: there is a 2% APR associated with CDPs. If one wishes to close out a CDP which issued one 500 dai a year ago, for example, one must provide 510 dai. The 500 dai is destroyed as usual, while the extra 10 dai goes into Maker’s profit reserves. * In return for the significant value that the limited default insurance gives to the holders of DAI bonds, Makercoin holders earn a continuous insurance fee that is equal to 4% of all outstanding DAI bonds per year (The insurance rate varies over time depending on market conditions and user growth elasticity in order to maximize Makers income). This fee is transferred into the market cap of MKR through the use of a buy&burn contract that continuously buys up MKR from the market and burns it, reducing supply and increasing market price. This means that MKR will see a steadily decreasing supply and a steadily increasing market cap over time, except in situations where the Dai Credit System hasn't been properly governed and the debt ceiling for one or more risky collateral types has been set too high. * Makercoin holders are able to directly influence the governance of Maker and the Dai Credit System through a futarchy-like governance scheme. They are also able to indirectly influence the system by buying and selling based on how well they believe the risk parameters are set (i.e. a MKR holder who sees the debt ceiling of a risky asset type being raised to unsafe levels would want to dump their MKR as soon as possible to avoid the risk of forced inflation). * The result is that MKR is an extremely risky asset, but with a significant cash flow as long as its owners are able to competently set the debt ceilings of the Dai Credit System, and proactively vote or sell their MKR if the debt ceilings are mismanaged. * MKR is distributed in batches via crowdsales on the Maker forums Team, etc. * Christensen, Rune; CEO, founder, de facto legal resposibility for the project * Casey, Ryan; one of the creators, worked on Maker together with Nexus * The Dai Foundation, as it will be called, is going to be located in the small Swiss town of Zug, next to Ethereum HQ, Dfinity stiftung, Akasha Foundation, Shapeshift, Xapo, and many other of the world leading blockchain and Ethereum projects. * Is being backed and advised by Polychain Capital * The newly created, a16z crypto, dedicated crypto fund by Andreessen Horowitz has purchased 6% of the total MKR token supply for $15 million USD. "The strategic purchase in MakerDAO is one of the first from a16z crypto, the newly created, dedicated crypto fund from Andreessen Horowitz. The move was driven by General Partner Katie Haun, an accomplished former federal prosecutor who led the first government task force on cryptocurrencies and also led the investigation into the Mt. Gox hacks and into the federal task force investigating Silk Road. “As a first mover and innovator in stablecoins, MakerDAO represents a very compelling opportunity in the crypto space,” said Katie Haun, “MakerDAO’s technology, ecosystem and talent have put theory into action to deliver a decentralized stablecoin that we believe will help drive the future of the crypto economy.” As part of this partnership, MakerDAO will receive operating capital through the next growth stage, 3 years of support for the MakerDAO community, and most importantly, full operational support from the 80+ person Andreessen Horowitz a16z team. Specifically, Dai Stablecoin adoption and regulatory support are two of the first priorities. * Using the 0x protocol Category:Companies/Organisations